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Tesla Opens Supercharging Network to GM and Ford

While we see the news as positive for the industry, there’s no impact on our fair value estimate for Tesla stock.

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Tesla Stock at a Glance

Tesla Stock Update

Tesla TSLA and General Motors GM announced a charging partnership whereby GM will integrate Tesla’s North American Charging Standard, or NACS, connector starting in 2024. This will allow drivers of GM electric vehicles to charge at 12,000 Tesla Superchargers throughout North America. Tesla also recently announced a similar charging partnership with Ford F to allow Ford EV drivers to use Tesla Superchargers. After reviewing these announcements, we see no reason to change our fair value estimate of $215 per share for Tesla stock. Our narrow moat rating is also unchanged.

Tesla shares were up 6% at the time of writing as the market reacted favorably to the news. However, at current prices, we view Tesla shares as fairly valued, with the stock trading a little more than 15% above our fair value estimate but in 3-star territory. Accordingly, we recommend that investors wait for a pullback in shares and for shares to offer a discount to our fair value estimate before considering an entry point.

Tesla, GM Partnership a Positive for EV Adoption

We view this news as positive for EV adoption in the United States. With EV charging unified under the NACS, drivers would be able to charge their vehicles at any Supercharger, much like how drivers of gas-powered cars can fill up at any gas station. We think other automakers will likely follow suit and the NACS will become the standard throughout North America. Combined with more charging stations being built along highways, this should alleviate the difficulty of finding a public charger, which is the largest barrier to EV adoption for U.S. consumers.

While this is good for the industry, we see less of a positive impact on Tesla. Arguably, access to the company’s fast-charging network could be considered an advantage that would cause a consumer to choose a Tesla over other EVs. However, we also don’t see the news as negative, as we think Tesla’s technological and cost advantages—which underpin our narrow moat rating—remain in place, and will allow deliveries to grow to 5 million vehicles by 2030, up from 1.3 million in 2022.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Seth Goldstein, CFA

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Seth Goldstein, CFA, is an equities strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers agriculture, chemicals, and lithium companies in the basic materials sector and is also the chair of Morningstar's electric vehicle committee.

Prior to assuming the equity analyst role in 2017, Goldstein was an associate equity analyst covering the basic-materials sector. Before joining Morningstar, Goldstein was a senior financial analyst for Oasis Financial, a financial analyst for Berkshire Hathaway Energy, and a field operations supervisor for the U.S. Census Bureau.

Goldstein holds a bachelor's degree in journalism from Ohio University and a Master of Business Administration, with a concentration in finance, from the University of Iowa. He also holds the Chartered Financial Analyst® designation.

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